My subscription
...
Filters
My Subscription All Publications

Peak inflation and the bond market

Although we think US inflation will fall back sharply over the next year, we expect long-term Treasury yields to rise further.
Thomas Mathews Markets Economist
Continue reading

More from Capital Daily

Capital Daily

Some market implications of the falls in commodity prices

We think further falls in commodity prices will contribute to continued underperformance of commodity-heavy parts of the global equity market, but won’t prevent government bond yields from rising to higher levels.

29 June 2022

Capital Daily

Rebound in long-dated Bund yields may have further to run

While we expect the recent rise in the yield of 10-year German Bunds to continue between now and the end of 2022, we think there is a significant risk that the recent calm in euro-zone “peripheral” bond markets is not sustained.

28 June 2022

Capital Daily

We doubt China’s stock market will go from strength to strength

We don’t think that the recent rally in China’s stock market sets the stage for extensive gains over the new few years.

27 June 2022

More from Thomas Mathews

Global Markets Update

The Fed and the Treasury yield curve

We now expect the Treasury yield curve to flatten further over the next couple of years but think that, in contrast with recent developments, this will happen alongside rising long-term yields.

9 December 2021

Global Markets Update

Assessing the market reaction to Omicron so far

This Update takes stock of the moves in developed market (DM) asset markets in response to the “Omicron” variant, and provides initial thoughts on how we think things might progress if some of the fears about it are realised.

3 December 2021

Global Markets Focus

Is inflation about to spell trouble for the stock market?

US inflation hit its highest level since the 1990s in October and has now reached a rate that, historically, has coincided with very poor stock market returns. Notwithstanding the uncertainty around the impact of the “Omicron” variant of the coronavirus, we don’t expect inflation to stay at quite such high levels, so we aren’t among those calling for a stock market crash driven by high inflation, or a decade of negative real returns like we saw in the 1970s. But we do think investors are underestimating the chance that inflation remains high enough to put the brakes on the stock market’s gains, which we think will be underwhelming over the next few years.

1 December 2021
↑ Back to top